The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, SEPTEMBER 26, 1940. WAR FINANCE.

Auckland Star, Volume LXXIV, Issue 229, 26 September 1940, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

THURSDAY, SEPTEMBER 26, 1940. WAR FINANCE.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, ilnd the good that toe can do.

In his Budget speech, when outlining the Government's borrowing proposals, the Minister said that "in this way the Government proposes to raise within New Zealand not only the money required to be expended in this country but also some portion of the amount necessary to meet expenditure abroad, thus relieving, so far as is possible, the drain upon the resources of the British Government." The purpose so expressed is laudable. It is indeed desirable that New Zealand should lean as little as possible upon the people of Britain; it is desirable also, as Mr. Nash pointed out, that New Zealand should avoid "piling up dead-weight overseas debt, that will be a heavy burden on us for many years after the war." But, though expressed only three months ago, the determination to achieve these purposes seems already to be weakening.- Yesterday Mr. Nash announced the terms, of the loan, and said it was estimated to provide at least £8,000,000. Is that sum to be devoted, in part, to "relieving the drain upon the resources of the British Government?" There is in the Minister's statement no precise assurance that it will be so used. On the contrary, it seems clear that when he has received the £8,000,000 £5,000,000 will be devoted to internal military expenditure. Is the balance to be squandered on the Government's socialistic schemes? For the support of New Zealand forces abroad a sum up to £20,000,000 will have to be found in Britain. , Moreover, it must be remembered that the expenses of New Zealand forces overseas are not at their peak. Numerically, the forces have not reached their maximum, nor, fortunately, have they been engaged in actual combat. How, then, does Mr. Nash propose to meet next year's expenditure? Does he hope to lean more, instead of less, on the United Kingdom Government?

The loan now to be raised, under threat of compulsion, is of course not the only war-finance measure of the Government. There is the national security tax, collected from all personal and corporate earnings in the Dominion. That tax, in conjunction with the loan now proposed, might be regarded as demonstrating the desire of the Government to bring about some approximation to " equality of sacrifice." But it has not done so. Half the wage and salary earners of New Zealand, soon after it was imposed, received an equivalent increase in 'earnings, and to their number has since been added most of the civil servants. Now, the terms of the loan make it clear that the Government is looking mainly, almost exclusively, to the companies and the large income receivers of the Dominion to subscribe the £8,000,000. These cannot look forward to equivalent increases in income to offset the national security tax; they must early next year pay the highest income tax on record—and they are providing a very lai'ge part of the increase in wages decreed by the Arbitration Court. They have now to raise, at very short notice, an amount equal to, and in many cases greater than, this year's income tax. That is, a company whose income tax is £10,000 (apart from social security tax, national security tax and land tax) will have to find another . £10,000, and find 70 per cent of it within three months. The consequences of this exaction cannot be calculated immediately. Meanwhile, it is clear that the Government's ideas of war finance are nearly all embraced in the term " socking the rich," and that it is unwilling, or for political reasons unable, to spread the burden as it should be spread. The proposal is unique in Empire finance and is capital confiscation not even thinly veiled.